While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
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As we close out the week, the market has been quite slow this week.
Yesterday was another narrow range day, with a daily range of only 10.50 points. And for the day, the S & P 500 closed down 4.12 points at 2,853.58.
The support area from yesterday is in the 2,855 to 2,857 area.
When we scale back and look at this week's weekly price bar, we see it only has a range of 27.45 points. The weekly average true range is 56.94 points, so you see how slow the trading has been this week.
The weekly midpoint so far is 2,849.70. And yesterday closed a few points above it.
So, watch the 2,850 are today because how the market closes today should tell us a lot as to the direction of the next minor move.
Pre open, the S & P 500 is trading about 13 points lower. This would put the open around 2,840, which would be about 11 points under yesterday's low.
So, the low should also be a level to watch if the market rallies.
The S & P 500 has moved up three levels since the last pivot low.
The last bottom stalled at the major 2,695.30 level and new we are just above the major 2,841.80 level.
We have actually had two closes above the next upside level, which is 2,854.00. This tells us that the upside objective should be to 2,890.60.
But after a three level move, the market often stalls at the next upside level.
If we do get a pullback, I would not expect that pullback to drop lower than the 2,744.10 level.
The point now is we need to be mindful that a minor correction could be coming.
Also, the short term intra day 30 & 60 minute charts still remain bullish, so short term momentum is still to the upside. The market is trading well above the mid bands on the 30 and 60 minute charts.
The midband on the 30 minute is 2,824 and for the 60 minute it is 2,790. These levels should offer support on a pullback. So, the market could drop as much as 64 points without putting the bull market in jeopardy.
On another note, my family and I will be out of town until Tuesday of next week. I will be back on Wednesday with the next update.
Enjoy your weekend!
Support from last week's weekly price bar is in the 2,818 to 2,830 area.
Continue to monitor the longer term levels for the market.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 23.44
Minor level: 20.31
Major level: 18.75
Minor level: 17.19
Minor level: 14.06
Major level: 12.50 <
Minor level: 10.94 **
Minor level: 7.81
Major level: 6.25
The VIX closed at 11.25. This is the first bullish close for the VIX in 5 days and it is back above the minor 10.94 level.
"Minor support is at 10.16. A break under 10.16 and the VIX should head lower." This was from yesterday. The VIX got as low as 10.17 before rallying to close higher.
As this point, a move up to 12.11 should tell us that the VIX should go higher. Resistance is still at 12.50.
SPX:
Major level: 2,890.60 <
Minor level: 2,878.40
Minor level: 2,854.00 **
Major level: 2,841.80 <
Minor level: 2,829.60
Minor level: 2,805.20
Major level: 2,793.00
Minor level: 2,780.78
Minor level: 2,756.33
Major level: 2,744.10
Target is up to 2,890.60. If the S & P 500 breaks under 2,849.10, it could drop to 2,836.90.
I would expect strong support at 2,836.90.
QQQ:
Major level: 187.50
Minor level: 185.94
Minor level: 182.81 **
Major level: 181.25 <
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
The QQQ closed at 181.91. Watch the 181.25 level, which should be support. A break under this level and the QQQ should head lower.
179.69 is minor support.
IWM:
Major level: 171.88
Minor level: 171.10
Minor level: 169.53
Major level: 168.75 <
Minor level: 167.97
Minor level: 166.41 **
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
The IWM closed at 168. Objective has been to 168.75 and yesterday's high came to within 4 cents of it. Good enough to say it was hit.
167.19 should be minor support. 170.31 could offer minor resistance on the upside.
And 165.63 should be major support.
TLT:
Major level: 123.44
Minor level: 121.49
Minor level: 120.70
Major level: 120.31 <
Minor level: 119.92
Minor level: 119.14 **
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
The TLT closed at 119.79. A close today above 119.14 would put the objective to 120.31. And the TLT is within 50 cents of it.
119.92 is minor resistance. If the TLT clears 119.92, it should move higher.
118.75 should be support.
GLD:
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
Minor level: 114.85 **
Minor level: 113.28
Major level: 112.50 <
The GLD closed at 114.74. Looking for a move down to 112.50.
115.63 should be resistance.
114.26 is minor support.
XLE:
Major level: 78.13
Minor level: 77.35
Minor level: 75.78
Major level: 75.00 <
Minor level: 74.22 **
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
The XLE closed at 74.83. To move lower, the XLE will need two closes under 74.22.
75 should still be support, until it is violated. Now resistance.
74.61 is a minor support level. A break under it and it should continue to drop.
FXY:
Major level: 86.72
Minor level: 86.53
Minor level: 86.14 **
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
Minor level: 84.58
Major level: 84.38
The FXY closed at 86.12. 85.84 should be minor support. A drop under this level and the FXY could drop to 85.55.
Watch the 86.14 level today.
AAPL:
Major level: 212.50
Minor level: 211.00
Minor level: 208.00 **
Major level: 206.25
Minor level: 204.88
Minor level: 201.63
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Apple continued higher and closed at 208.15. 206.25 should be strong support.
Apple has now closed back above the upper band.
207.81 is minor support.
WATCH LIST:
Bullish Stocks: SPY, COST, AAPL, ASML, UNP, PAYC, AAP, DXCM, KLAC, JPM, SODA, WST, MSFT
Bearish Stocks: BIDU, STZ, WAT, BABA, URI, CBOE, ALB, ALNY, SINA, TSN, AIG
Be sure to check earnings release dates.